Surveillance Measures Available To Maintain Efficient Functioning Of The Market: SEBI Amid Adani Stock Crisis

Without naming the Adani group SEBI said during the past week, unusual price movement in the stocks of a business conglomerate has been observed

The Securities and Exchange Board of India (SEBI) on Saturday issued a statement on market stability following the week-long Adani stock meltdown. Without naming the Adani group SEBI said during the past week, unusual price movement in the stocks of a business conglomerate has been observed.

“As part of its mandate, SEBI seeks to maintain the orderly and efficient functioning of the market and has put in place a set of well-defined, publicly available surveillance measures  (including the ASM framework) to address excessive volatility in specific stocks,” SEBI said. 

Adding these mechanisms gets automatically triggered under certain conditions of price volatility in any stock.

The statement comes as for the past few weeks stock prices of the Adani group of companies have been declining sharply. The group even had to retract its Follow-On Public Offering (FPO) of shares worth Rupees 20,000 crore last week. 

Adani Group stocks have been under stress since Hindenburg in its research report titled 'Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History', questioned the accounting and corporate governance practices of Adani Group, and also raised the issue of heavy debt last week.

The allegations were strongly refuted by the Adani Group which said Hindenburg’s report is timed with a "mala fide intention" to damage Adani Enterprises FPO.

India’s market regulator said that it is committed to ensuring market integrity and to ensuring that the markets continue to have the appropriate structural strength to function in an uninterrupted, transparent, and efficient manner.

SEBI said, “Further, in all specific entity-related matters, if any information comes to SEBI’snotice, then, as per extant policies, the same is examined and after due examination, appropriate action is taken. SEBI has consistently followed this approach on entity-level issues and would continue to do so in future as well.”

Additionally, the market regulator also said that the Indian financial market as has demonstrated ongoing stability and is continuing to function in a transparent, fair, and efficient manner. On a longer-term basis also, Indian markets have been viewed positively by investors. Across-country comparison of dollar-adjusted market returns with both peer and developed countries, during the past 3 years till date, places the Indian market as a positive outlier.